Author: Eli Hamacher | Freelance Business Journalist
First published in November 2016
We collected very conscientiously all the packaging, banana peels, old newspapers and Limca bottles in a plastic bag during the twelve-hour train ride to Mumbai. The next morning, a staff member snatched the plastic bag and threw it quickly out of the window. The shocked look from three young Germans did not bother him at all. One of my father’s favorite sayings crossed suddenly my mind: “When in Rome, do as the Romans do” From then onwards, I did it just like the Indians do.
“India through German Eyes”, was the article`s title of the Economic Times on 1st August 1987. After a one year traineeship at the Times of India, the Chief Editor instructed me to portray my experiences and impressions. The writing ended with the sentence: I must come back! I did. Many times, actually. The last time was a trip to Bengaluru in 2014, to explore the Indian Silicon Valley and finally to New Delhi in 2016. The population has tremendously increased from 800 million to unbelievable 1.2 billion since my first visit.
September 18th 2016, shortly after midnight: As soon as the plane touched the Indian soil, phones started ringing and Indians were talking loudly to their family & friends. Welcome to India, where rules are preferably laid-out casually, apart from the road traffic, where anarchy dominates. Red traffic lights, zebra crossings, one way streets, lanes, one rather senses them as a recommendation. No surprise: The luxury good which was exclusively available either as an Ambassador or a Maruti 30 years ago, has now developed into an affordable status symbol among the growing middle-class, made in India, Japan, Korea, France or even Germany. One thing that has puzzled me the most: I did not see even one accident. Once a taxi driver mentioned to me three factors essential in the city, and apparently, they seem to be true: “In India you need good brakes, a good horn, and good luck!”
Economy-wise, the difference between now and then could not be more outstanding. The country which was more or less cut off from the outside world and therefore, closed to international investors during Prime Minister Rajiv Gandhi`s regiment in 1986, is now open: This is very well visible at Connaught Place, CP, my favorite place in New Delhi, where global players, ranging from Adidas to Zara, have replaced Indian dealers. Thus, the Indian liquor store is still the one mostly visited.
Like everywhere else around the world, digitalization has pushed young unknown founders in India to become shooting stars in a short period of time, whether we name India`s OYO Rooms, AirBnB, Makemytrip, or booking.com. I met an Indian entrepreneur, living in Cologne from the past 20 years, who contemporaneously started a software start-up in Gurugram and Cologne in order to benefit from the best from both worlds: the quality awareness of Germans and the cleverness of Indian software engineers as well as low labor costs.
Despite all adversities related to corruption, overburdening bureaucracy and inadequate infrastructure, many German SMEs are overly optimistic. They invest in new plants, quality assurance and most importantly, the training and further education of their employees. Indeed, they also hope for the introduction of the Goods and Service Tax (GST) which will simplify procedures and lower the tax regime. This will be definitely Modi’s masterpiece. So far, the entrepreneurial success does not have much in common with the actions of the new government.
Modi, an excellent salesperson, is addressing the most urgent problems with his effectively advertised campaigns “Clean India, Skill India & Make in India” since his landslide victory in 2014: environmental pollution, skill gaps, and the weak industrialization. However, if we ask Indian or German entrepreneurs about the concrete changes today, the reaction will not be euphoric at all. Only a few small changes are made until now, for instance, the government authorities are granting permits faster or at least simplifying bureaucratic procedures. Further, thanks to the Government’s black money initiative, many loop holes were closed. The major achievement, whether it be the tax system, the land acquisition, or education have not been addressed yet.
“Red carpet instead of red tape” was one of the top slogans of the new Government to lure foreign investors into the country. A medium-sized company business man speaks for many entrepreneurs, when he says “Modi starts with its reforms at the top. But, we have to submit our applications at the bottom, where not much has changed yet.” And still, you don’t want to miss the chance to invest in one of the biggest growing economies. This is even the case for small sized German companies, who still prefer India due to the language barriers in the BRIC countries Brazil, Russia and China.
Deep within, many entrepreneurs hope for a big bang, for the day when the under-estimated giant rises from the ashes just like Phoenix. It will not happen. The country is too big, far too cumbersome and imprisoned in a complicated system where corruption and bureaucracy will not be eradicated soon. But if Modi continues with the same high pace with all reforms as he did with the Goods and Service Tax (GST), India could have the chance to become an even more attractive market for investors, not only for MNCs but also for German SMEs.
If the train journey to Agra was an omen, it would be a good one. The train starts its journey to Uttar Pradesh just in time on my penultimate day of travel. The staff serves water, newspapers and breakfast, all included in the ticket price, and collects all garbage at the end – and does not throw it out of the window. All that happens faster compared to any German plane. Moreover, a staff member distributes customer feedback forms. Indeed, Deutsche Bahn Head Grube can learn a lot from the Indian Railways.
Eli Hamacher is a freelance business journalist and lives in Berlin. The economics graduate was working for the Times of India in New Delhi from 1986 till 1987. After that she returned to India several times, lastly to Bengaluru in 2014 and to New Delhi in 2016 where she reported about German SMEs for her clients.